O'Regan & Anor v Lotty & Ors (Approved)

1.������ This is an application to dismiss the plaintiffs� claim for want of prosecution on� grounds of inordinate delay. The rules applicable are clear.� The defendants must establish that delay of the plaintiffs in the prosecution of their claim is� both inordinate and inexcusable. Where these matters are established, the court must exercise a judgment on whether the balance of justice is in favour of, or against,� the proceeding of the case.

2.������ The case� pleaded in the statement of claim is that in October 2007 Bank of Scotland (Ireland) Limited (the bank) gave the plaintiffs a loan of �4,500,000 for a term of 67 months to enable them to buy a block of 15 apartment units� attached to a hotel in Killarney, County Kerry. The defendants were the plaintiffs� accountants. Some of the defendants were involved in the entity promoting the development.

3.������ These arrangements were part of a scheme devised by the defendants to fund the Killarney development which was� designed to give investors tax relief. The promoters committed themselves� to buy the units from the plaintiffs at the end of the period of the scheme for �4,500,000. This payment� would enable the plaintiffs to repay loan capital which then became due. In the meantime, the plaintiffs would pay interest on the loan.

5.������ In the latter part of 2007 the bottom was beginning to drop out of the Irish property market. In 2008 and 2009 it must have become obvious that the promoters might not be in a position to buy back the units at a price equal to the amount of capital advanced on the loan at the end of the period of the scheme. It may also have been obvious that the realisable value of the assets pledged as security might produce a shortfall when the loan fell due for repayment. These assets consisted of the 15 apartments in Killarney and a commercial property in the centre of Cork City.

6.������ The legal documents which formalised the arrangement did not limit personal recourse to the borrowers to payment of interest. The bank was treating them as personally liable for repayment of capital and interest. The plaintiffs, in an affidavit sworn on their behalf by their solicitor, claim that they first became aware of this � in or around 2010 �.